Binders Full of Women: For College Grads, the Pay Gap Is Alive and Well

Two weeks after undecided voter Katherine Fenton asked President Barack Obama and Governor Mitt Romney how they planned "to rectify the inequalities in the workplace, specifically regarding females making only 72 percent of what their male counterparts earn?" the internet is still snarking on Romney's now infamous "binders full of women" reply. But Fenton's question needs answering more than ever. According to "Graduating to a Pay Gap", a just-released report from the American Association of University of Women, one year after graduation, women are only being paid 82 cents for every dollar earned by their male peers.

The report looked at data on grads from 2009, the most recent year available and confirmed what we all know: the pay gap is alive and well. Although "education and occupational differences between men and women" explain part of the pay gap—men are more likely than women, for example, to major in higher paying fields like engineering and computer science while women dominate low paying majors like education and social science—a full one-third of the gap "cannot be explained by any of the factors commonly understood to affect earnings."

A year after receiving their degrees, "a hypothetical pair of graduates—one man and one woman—from the same university who majored in the same field," and work full time for the same number of hours per week in the exact same job won't earn the same salary. How bad is the gap? The woman would earn roughly 7 percent less than the man. That might not seem like much to some, but, as the report notes,"having less money means that women have more limited choices." When that woman is coming out of college with the same amount of student loan debt as the man, she has less cash to pay the monthly bill, and that affects her for the rest of her life.

Which brings us back to Fenton's question—the same one that's been asked by countless women over the years: How do we fix this? The AAUW says a first step is for society to actually recognize the pay gap as a problem. "Too often," the report says, "both women and men dismiss the pay gap as simply a matter of different choices."

One of the AAUW's suggestions is one that most businesses won't appreciate: an end to pay secrecy. There's less discrimination in public sector jobs than in the private sector because pay is, well, public. People may not know exactly what their colleagues earn, but salary ranges for positions are usually transparent—only 16 percent of public sector workers are forbidden or strongly discouraged from sharing what they earn.

In contrast, a full 61 percent of private sector employees are "either forbidden or strongly discouraged from discussing their pay with colleagues." It's a whole lot easier to not pay a woman what she deserves when she has no idea that she's being discriminated against every time her paycheck's printed.

The Lilly Ledbetter Act of 2009, which President Obama referenced during the debate is a step in the right direction. However, the AAUW also recommends a reintroduction of the Paycheck Fairness Act, legislation that would expand the Equal Pay Act of 1963 and the Fair Labor Standards Act of 1938. It's been twice introduced and defeated by Congress. If we want future generations of women—whether they have a degree or not—to be paid equitably, we have to take action.

Want to help put it back on Congress' agenda? Drop your representative a message here.